Nikkei up 0.4 pct after five days of losses

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By Taiga Uranaka

TOKYO, June 26 (Reuters) - Japan's Nikkei stock average rose 0.4 percent on Thursday after falling for five days, with investors picking up recently battered shares such as Sony Corp (6758.T).

But the Nikkei slipped in and out of positive territory as concerns about the health of financial institutions and an economic slowdown kept a lid on the rebound, which had been expected after the longest run of losses this year.

"There are lingering worries that U.S. financial institutions may suffer additional mortgage-related losses. The market is likely to be unstable until after U.S. bank earnings next month," said Yoshihiro Ito, senior strategist at Okasan Asset Management.

The benchmark Nikkei .N225 ended the morning up 59.43 points at 13,889.35. The broader Topix rose 0.3 percent to 1,350.37.

Sony rose 3.1 percent to 5,070 yen, one of the biggest contributors to the Nikkei's gain.

But Tokyo's advance was limited by the absence of active trading in shares with particular themes that had recently attracted retail investors.

"I don't see stocks that serve as a pillar in the day's market. Environment-theme stocks have run out of news for now, and investors are looking for the next trading theme," said Norio Shimura, deputy head of the equity department at Chuo Securities.

Tokyo shares reacted little to the U.S. Federal Reserve's decision to keep interest rates steady on Wednesday and signal it was in no hurry to raise them, even as it voiced greater concern about inflation. [ID:nN25433059]

"It has no impact to speak of. It's pretty much the same as before, keeping a neutral stance," said Ito at Okasan Asset.

TRADING HOUSES DOWN

Trading houses fell after U.S. crude oil futures ended lower on Wednesday following government inventory data showing a surprise increase in U.S. crude supplies last week.

Mitsubishi Corp (8058.T) fell 2.3 percent to 3,430 yen, becoming one of the biggest drags on the Nikkei, and Mitsui & Co (8031.T) fell 1.5 percent to 2,335 yen. The firms have stakes in oil fields overseas.

Drug makers, seen as less vulnerable to an economic downturn, rose, with Astellas Pharma Inc (4503.T) up 2 percent at 4,620 yen and Daiichi Sankyo Co Ltd (4568.T) gaining 2.7 percent to 2,910 yen.

Trade was thin, with 813 million shares changing hands compared with last week's morning average of 919 million.

Advancers outnumbered decliners 805 to 763. (Editing by Chris Gallagher)